Rupee up 13 paise at 55.21 on dollar weakness

Tracking gains in stock market, the rupee on Wednesday firmed up 13 paise to close at 55.21 on persistent selling of dollars by banks after a German court's verdict on a new EU bailout fund softened the global demand for the American currency.

Sustained capital inflows of over Rs 450 crore (Rs 4.5 billion) from foreign funds into equity market also supported the rupee's gain against the dollar, forex dealers said.

The rupee resumed higher at 55.23 per dollar compared to its the last closing level of 55.34 per dollar at the Interbank Foreign Exchange Market.

The rupee gains became pronounced just before mid-day in Europe as the euro rose against the dollar after German judges removed a major obstacle to the region's new bailout fund, European Stability Mechanism.

The rupee soon after hit 55.14, its

best in three weeks.

Dollar wilted further as investors focussed on US Fed's next meeting amid rising expectations of further stimulus.

But mixed UK employment data dented demand and rupee fell to 55.37 per dollar, before ending better at 55.21 -- a rise of 13 paise, or 0.23 per cent.

"Rupee got a lot of support on the back of positive news flow from Europe in the form of German court's consent to bailout funds.

This prompted Euro to go beyond 1.29 level, which pushed the domestic currency," Hemal Doshi, Currency Strategist, Geojit Comtrade.

The announcement after the US Fed meeting on Thursday would be keenly watched by the investors across the global markets, said Abhishek Goenka, Founder & CEO, India Forex Advisors.

Meanwhile, the Indian stock market benchmark Sensex ended higher by 147 points, or 0.82 per cent, to end above 18,000 points -- the first time since February-end.